PayPal Overcomes Glitches

PayPal Overcomes Glitches

Credit: Robin Arnfield

PayPal (Nasdaq: PYPL - news) says it has recovered from the software glitches that disrupted the online payment service starting Friday, October 8th.

PayPal is owned by online-auction company eBay (Nasdaq: EBAY - news), for which it provides a person-to-person payment facility.

eBay posted a message on its Web site Thursday, stating that "PayPal functionality has been restored and PayPal users, on and off eBay, are able to resume normal trading activities."

eBay also said that no users' personal information had been compromised during the glitches. Things Look Good

"Things are looking pretty good as of this morning," PayPal spokesperson Sara Bettencourt told NewsFactor. "Users are able to resume normal trading and transact as normal."

Despite the new statement from eBay, the PayPal's Web site still displayed a statement dated October 13th that advised users experiencing problems with the system to try a second time. "Should you experience an error when trying to log into the PayPal site or perform a PayPal activity, please try again," the statement says. "A few residual issues may still be impacting some users."

Coding Update

The glitches occurred when PayPal conducted a monthly software update on October 8th, the company said.

PayPal is the main Internet-payment system for eBay auctions, as well as for smaller e-commerce sites.

The intermittent outages caused problems across the PayPal service, from access to the site and account information to PayPal's debit-card and shipment services.

Gartner analyst Avivah Litan was not impressed with PayPal's explanation.

Fallback Plan

"PayPal should have fallen back to its previous software when problems occurred as a result of putting in the software update," Litan told NewsFactor. "It would be unacceptable for any bank to be down for as long as PayPal was. But banks offer their customers a number of payment channels apart from the Internet. With PayPal, you can only use the Internet."

"When eBay has problems as a result of a software update, it falls back to the previous version," Bettencourt told NewsFactor. "PayPal could have done that last Friday, but it would have been very complicated to fall back, as we have a different architecture than eBay. Our software team decided that they should work to fix the problem with the software update rather than fall back."